Cerberus to pay $7.4 billion for 80% of Chrysler

LONDON (MarketWatch) -- Cerberus Capital Management on Monday agreed to inject $7.4 billion into Chrysler, in return for an 80.1% stake in the Detroit automaker, with DaimlerChrysler
dcxDAI, -2.43%
holding the remaining 19.9%. Cerberus also will take on Chrysler's pension obligations. For DaimlerChrysler, which will rename itself Daimler, the deal will hurt 2007 profit by between $4.1 billion and $5.4 billion, will result in a cash outflow of $650 million and an $878 million prepayment compensation for discharging long-term Chrysler liabilities. The deal has won the surprise backing of teh United Autoworkers, which said in a statement that the deal is in the best interests of UAW members, Chrysler Group and Daimler.

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